CIT Group reported Q1/18 net income of $97 million was off 46% compared to net income of $180 million in the same year-ago quarter. The bank noted a decline in net finance revenue and an increase in the provision for credit losses were partially offset by lower operating expenses and higher other non-interest income.

“In the first quarter, we posted solid growth in our core businesses and continued to make significant progress on our strategic plan,” said CIT Chairwoman and CEO Ellen R. Alemany. “Origination volumes increased significantly year-over-year, and the direct bank franchise continued to grow, adding $1.5 billion in deposits and more than 28,000 new customers. Affecting results was a single commercial exposure, and excluding that, credit performance was generally stable and credit reserves remain strong.”

New lending and leasing volume decreased to $2.3 billion from $2.9 billion sequentially, representing declines in all divisions, due to strong and seasonally high volumes in the prior quarter and typically lower volumes experienced in the first quarter. CIT noted that compared to the year-ago quarter, new lending and leasing volume increased 40%, with strong growth in Commercial Finance, Real Estate and Business Capital.

Business Capital, which includes Equipment Finance, total loans and leases at the end of Q1/18 of $6.53 billion were up 7% from $6.12 billion a year earlier. Net finance revenue in Q1/18 of $75.6 million was down 10% from $83.9 million a year earlier. The gross yield of 7.57% was down from 7.63% in Q1/17. CIT said funded volume in Q1/18 increased 20% compared to the year-ago quarter.

The provision for credit losses of $69 million in Q1/18 was up 38% from $50 million for the same quarter in 2017. The bank said the increase primarily reflected a $22 million charge-off of a single commercial exposure and a higher level of reserves primarily within the Commercial Finance division of Commercial Banking.

The net finance margin of 3.45% was down 12 basis points from 3.57% a year earlier.